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Communication dans un congrès Année : 2009

Stock Market Liquidity and the Rights Offer Paradox

Résumé

This paper contributes to the resolution of the rights offer paradox, using a database of French SEOs. We first document higher direct flotation costs, but also improved stock market liquidity after public offerings and standby rights relative to uninsured rights. We find that blockholder renouncements to subscribe to new shares and stock market liquidity are important determinants of flotation method choice. After controlling for endogeneity in the choice of flotation method, we find that public offerings are cost effective and more liquidity improving than standby rights whereas an uninsured rights offering is the best choice for low liquidity, closely held firms. Our results provide new insights as to why firms choose public offerings despite apparently higher costs.
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Dates et versions

halshs-00673292, version 1 (23-02-2012)

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  • HAL Id : halshs-00673292 , version 1

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Edith Ginglinger, Laure Matsoukis, Fabrice Riva. Stock Market Liquidity and the Rights Offer Paradox. FMA Reno, Oct 2009, United States. pp.xxx-xxx. ⟨halshs-00673292⟩
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Dernière date de mise à jour le 20/04/2024
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